NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING
DONATE TODAY



  November 4, 2013

Nigeria Overtakes South Africa as Continent's Largest Economy


Leonce Ndikumana: Nigeria revises economic data and will displace S.A. as Africa's largest economy.
Members don't see ads. If you are a member, and you're seeing this appeal, click here
   


Audio

Share to Facebook Share to Twitter



The Real News is a vital answer to The New York Times, the house organ of the oligarchs. - Al Salzman
Log in and tell us why you support TRNN


biography

Leonce Ndikumana is Professor of economics and Director of the African Development Policy Program at the Political Economy Research Institute (www.peri.umass.edu) at the University of Massachusetts at Amherst. He is a member of the United Nations Committee on Development Policy, Commissioner on the Independent Commission for the Reform of International Corporate Taxation, a visiting Professor at the University of Cape Town, and an Honorary Professor of economics at the University of Stellenbosch, South Africa. He has served as Director of Operational Policies and Director of Research at the African Development Bank, and Chief of Macroeconomic Analysis at the United Nations Economic Commission for Africa (UNECA).


transcript

Nigeria Overtakes South Africa as Continent's Largest EconomyJESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I'm Jessica Desvarieux in Baltimore.

Nigeria is expected to release revised economic numbers from 1990 to 2008. That is expected to show that the country has overtaken South Africa as Africa's largest economy.

With us to discuss all this is professor at the University of Massachusetts Amherst Léonce Ndikumana. He is a professor of economics at UMass Amherst, as I mentioned, and he's the director of the African Policy Program at the Political Economy Research Institute (PERI).

Thank you for joining us.

LÉONCE NDIKUMANA, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you very much for the opportunity.

DESVARIEUX: So, Professor, let's talk about Nigeria. It's moving to become the number-one economy on the African continent. What is the cause behind this rapid economic growth?

NDIKUMANA: Thank you very much. I think this is a very important and interesting question.

There are two things that we need to single out. One is that even as of today, Nigeria is the second-largest economy on the continent, with about $262 billion in 2012, compared to $384 billion GDP for South Africa.

The second one is that Nigeria had been growing quite fast. In 2011, they grew by 7.4 percent, which that went down a little bit to 26.6 percent in 2012. At the same time, South Africa's been growing a little bit slower, in the range of 2 to 3 percent, which is consistent with a more mature economy. So that by itself would mean that over time Nigeria is going to get closer and closer to South Africa. Even if you look at the last 12 years, in 2012 the economy of South Africa was about three times larger than the economy of Nigeria. Now it's about 1.5 percent.

Now you bring in another factor, which is the rebasing of the national data in Nigeria, which is something that other countries are going to also have to undertake because their national accounts based on outdated--have outdated bases, in the sense that some sectors which were not there when they were doing the calculations now are more predominant in production of goods and services. One of the biggest new innovation is the telecom sector, which is becoming a bigger and bigger part of the service sector. So this requires countries to go back in their statistics and redo the weighting of each economic sector. And this, for many countries, is going to result in a larger major amount of national output, which is GDP. Ghana has already done it, and Nigeria is on track of releasing their new statistics. And this will result in a larger GDP for Nigeria. And, again, as you said, it may be the case that they may be either closer, even take over South Africa, assuming that South Africa doesn't do the rebasing [incompr.]

DESVARIEUX: And I can imagine what's propelling this rapid growth is that three-letter word, oil, since Nigeria has a lot of it. What do you make of that?

NDIKUMANA: Yes. As you indicated, the rapid growth in Nigeria over the past years is driven mainly by the oil sector. To give you an example, of the six point--while the country as a whole grew by 6.6 percent in 2012, the oil sector actually grew faster, by 8 percent, which means that some of the sectors were shrinking. And this poses--is a source of concern because oil, the oil sector, as we know, is a very capital-intensive sector, which means that it doesn't create lots of jobs.

At the same time, since we're talking about South Africa and Nigeria, they share two important problems. One is unemployment, and the second is [incompr.] to global markets, shocks in global markets. Unemployment has been high in South Africa. It's known. And they have very good statistics. It's about 25 percent. In fact, Nigerian unemployment over the past two years has been increasing from 21 percent to 24 percent. So even as the economy's growing in Nigeria, unemployment is actually growing at the same time, which is the result of the fact that growth is taking place in sectors that are not creating employment. So this is a major, major problem for Nigeria.

At the same time, the sectors which are the life--which provide the life for the majority of the population, especially agriculture, is not growing as fast, because there has not been sufficient investment in technology so that productivity in agriculture, the mainstay of the livelihood of the population, is actually seeing a decline in productivity. And that is true for Nigeria as well for many other countries. So the challenge for Nigeria is how to harness these oil resources so that the growth in revenue that's coming from oil can actually trigger expansion in other sectors outside of the oil sector.

DESVARIEUX: Alright, Professor Ndikumana. Thank you so much for joining us.

NDIKUMANA: Thank you very much.

DESVARIEUX: And thank you for joining us on The Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.



Comments

Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

latest stories

Let's Make Real News!
The European Revolt Against the Neoliberal EU (2/2)
Portia Boulger, Featured in Viral Video Viewed by Millions, Explains her Anger at DNC
Donald Trump: The Raw and Naked Face of a System That Showers Speculators with Obscene Riches
Baltimore's Tax System Takes From the Poor to Give to the Rich
The Empire Files: Bringing Corporations to Justice with Ecuador's UN Rep
The European Revolt Against the Neoliberal EU (1/2)
DNC Protesters Push into Convention Perimeter Demanding Their Voices be Heard
Bernie Delegate Network Press Conference
Bernie Sanders Supporters Booed Debbie Wasserman Schultz Off Convention Stage
Sanders Supporters React to Meeting with Sanders Ahead of his DNC Speech
Green Party Nominee Jill Stein Leads Rally Outside ‪DNC‬
Sanders supporters march on DNC
How Progressive is Elizabeth Warren?
Tariq Ali: Brexit and Migration
Turkey's Night of Long Knives
The Laura Flanders Show: Fighting Islamophobia & Education Apartheid
DNC - Protest Rally Day 1
Defeated at Rules Committee, Fight to End Superdelegates Heads to Convention Floor
Will Sanders Delegates Disrupt the DNCC?
People for Bernie Call For Civil Disobedience at the DNC
Protestors Loudly Demand Entry into DNC Rules Hearing
After Trump's Fear and Security Speech, Damage Control at DNC?
Pocomoke's First Black Police Chief Indicted
Trump Policy Will Unravel Traditional Neocons
Trump's Neo-Fascism Appeals to Victims of Obama/Clinton Economics
Many Sanders Delegates Ready to Fight Over VP Pick
Jill Stein: 'The Politics of Fear has Delivered Everything We Were Afraid Of'
Protests Against Republican Party "War on Women"
Talking Turkey, Kurds and ISIS at the RNC

TheRealNewsNetwork.com, RealNewsNetwork.com, The Real News Network, Real News Network, The Real News, Real News, Real News For Real People, IWT are trademarks and service marks of Independent World Television inc. "The Real News" is the flagship show of IWT and The Real News Network.

All original content on this site is copyright of The Real News Network. Click here for more

Problems with this site? Please let us know

Linux VPS Hosting by Star Dot Hosting